Denied insurance claims are what our lawyers fight.

A residential property insurance claim when denied, delayed or underpaid can be a life altering event for a policyholder, but for an insurer, it is routine business. A property insurance claim is a business negotiation, and policyholders must approach the adjustment and settlement of their property insurance claim as they would any other business transaction involving a large investment. Few homeowners understand that taking legal action regarding their insurance claim is an option.

When a commercial property loss occurs, a business owner’s first impulse is to do whatever necessary to mitigate the loss and resume operations as quickly as possible. But settling a denied, delayed or underpaid commercial property insurance claim is a complex business transaction, and business owners should treat it as such, using the diligence and professional assistance typically used when negotiating a critical business contract.

Getting your disability, life, health, or long-term care insurance company to pay your claim can be a daunting task. We understand the task can be even more daunting when you are struggling physically, emotionally, or mentally. With decades of experience in representing insurance policyholders in contractual and extra-contractual (bad faith) disputes, we look forward to helping you successfully manage these difficult times.

Our insurance lawyers have the experience with insurance claim disputes that you need to get the settlement you deserve. Merlin Law Group is a boutique insurance law firm with persistent and tenacious attorneys that navigate the complex arena of insurance claim disputes and litigation. Our insurance claim law firm has successfully represented thousands of homeowners and business owners across the United States and have offices in AZ, CA, CO, FL, IL, NY, NJ & TX. We have licensed attorneys in: Alabama, Arizona, California, Colorado, Florida, Georgia, Hawaii, Illinois, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New York, New Jersey, North Carolina, Oklahoma, Pennsylvania, Tennessee, Texas, U.S. Virgin Islands & Washington, D.C. to assist with insurance claim disputes and represent all insurance claims for property damage or commercial losses that may have been denied, underpaid or payments have been delayed anywhere in the United States. Our insurance attorneys have been admitted Prohac in all states throughout the country and in the Caribbean including St. Thomas and Puerto Rico for our clients.

If you feel like your windstorm, fire, hail, tornado, hurricane, wildfire, water damage or drought insurance claim has been improperly handled, has not been properly paid, or if your claim has been unfairly denied, call our team of experienced insurance attorneys for a free case review. Merlin Law Group is The Policyholder’s Advocate®. For nearly three decades, we have dedicated ourselves to standing up against insurance companies and their corporate lawyers. Call an experienced insurance lawyer today.

On November 30, 2016, the Fifth Circuit Court of Appeal affirmed an order by the Northern District of Texas granting summary judgment for State Farm that an insured’s breach of contract claim was time barred under the limitations clause in the policy and by statute, because it accrued as a matter of law when State Farm first closed its claim file.1

Here are some of the key dates and facts:

May 2012: Insured filed claim with State Farm for property damage caused by hail and wind storm in April 2012.

May 2012: State Farm sent adjuster to inspect property. Adjuster noted there were deteriorating shingles on the rear slope of the roof and “evidence of small hail on an aluminum vent cap.” The adjuster also noted that the “[h]ail was too small to damage the shingle” and that some minor damage caused by an overhanging tree constituted a maintenance issue excluded under the insured’s policy. Thereafter the adjuster informed the insured that the inspection revealed no damage covered by her insurance policy.

June 11 and 12, 2012: State Farm adjuster entered notes into its claim management system, evidencing its intention to issue a denial of coverage letter to the insured. The notes indicated that the letter was to explain that the roof damage was the result of maintenance issues excluded from coverage.

July 12, 2012: State Farm closed its file.

August 17, 2012: Insured requested that State Farm reinspect the property.

August 20, 2012: State Farm reopened insured’s claim.

August 23, 2012: State Farm sent a new adjuster to reinspect the property. Because the adjuster observed damage to a metal patio cover not listed in the initial inspection report and the cost of repairing the damage the inspection uncovered was less than he insured’s deductible, State Farm again closed the insured’s claim without payment.

August 23, 2012: State Farm sent denial letter, acknowledging minor damage but explaining that it would not pay because the amount did not exceed the deductible.

The dispute in this case was whether the claim accrued on the date State Farm denied the insured’s claim (July 12, 2012) or when State Farm reinspected the insured’s property and again denied coverage (August 23, 2012).

The insured asserted that she never received a June 2012 denial letter, and State Farm issued no payment to her when it closed her file on July 12, 2012. She further stated that the August 23, 2012 letter was the only denial letter she received from State Farm.

The Fifth Circuit Court of Appeal stated:2

State Farm argues that closing De Jongh's claim for the first time on July 12, 2012, constituted an outright denial that triggered the limitations clock. We agree. Under Texas law, “a cause of action accrues when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later.” Kuzniar v. State Farm Lloyds, 52 S.W.3d 759, 760 (Tex. App.—San Antonio 2001, pet. denied) (en banc) (quoting S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)). While the “discovery rule” will delay an accrual date if the injury is fraudulently concealed or inherently undiscoverable, id, De Jongh disclaims reliance on the discovery rule. In Kuzniar, the insureds filed a claim with State Farm in August 1992 regarding a possible plumbing leak under their home. Id. at 760. The adjuster instructed the insureds to have a plumber inspect the property and confirm the leak but the insureds neglected to follow the instructions or communicate further with State Farm. Id. In January 1993, State Farm closed the claim file; however, the insureds did not file suit until August 1996—over three and a half years after the claim file was closed. Id. This Court affirmed summary judgment for State Farm, reasoning that the legal injury arose in January 1993 because “[t]he closing of the claim file was an objectively verifiable event that unambiguously demonstrated State Farm's intent not to pay the claim, ‘even if the fact of injury [was] not discovered until later.’ ” Id. (quoting S.V., 933 S.W.2d at 4). Summary judgment was proper because the cause of action accrued when State Farm closed the claim file and the insureds failed to bring suit within two years of that date. Id. at 761.

The last sentence of the Court’s opinion is significant: “As the claim file shows, State Farm intended to issue a written denial in conjunction with closing the claim file. Even if the failure to send a denial letter was tortious, it does not reset the limitations clock to State Farm's subsequent denial.”3

Property managers and condominium leaders will face an issue after Hurricane Matthew becoming all too recurrent following catastrophes—slow and underpaying property insurance carriers. While partial payments for small percentage amounts of easily agreed to damages are often made, full payment made within 90 to 120 days is almost non-existent with significant losses. Who can wait for that long to start substantial repairs?

A further problem facing most coastal apartments, condominiums, and homeowner associations is the large windstorm deductible which will likely apply. A five percent deductible does not seem large, but when applied to a large building with millions of dollars as the policy limit, the deductible amounts can wind up in the hundreds of thousands of dollars. Insurance agents should always obtain quotes for "deductible buydown coverage." Many insurance agents fail to do this (which is clearly malpractice by insurance agents) and some in management decline the coverage after considering the quoted premium cost.

Faced with non-payment of insurance funds and large deductibles, the issue arises regarding how to pay for repairs which need to be completed immediately. The answers are not perfect, but I will try to highlight some considerations.

The insurance restoration industry and contractors will push that the answer can easily be found by using an assignment of benefits clause in a construction contract. Simply sign a construction contract for all repairs less the deductible and assign the benefits of the policy claim to the restoration contractor. Assignment of benefit clauses are allegedly giving rise to and supporting fraudulent practices, "gaming" the insurance adjustment process, being overly broad and often civilly or criminally illegal. Richard "Dick" Tutwiler wrote a guest blog on the topic from the standpoint of public adjusters in The Unlicensed Practice of Public Adjusting - The Insurance Claims Keep Rolling In.

Managers and association leaders should be concerned about the scope of repairs promised to be accomplished. It is critical that they thoroughly check the references of any such contractor and interview multiple contractors if they choose to accept this route of repair. Merlin Law Group attorney Nicole Vinson wrote an analysis of this in Policyholders Should Be Aware of Assignment Provisions.

Associations could consider using reserves. For example, if the association has half of a roof replacement already reserved, why shouldn't it be able to tap into those reserves to finance the repair or replacement of association property? This is a complicated area and I suggest that property managers and association boards consult with an experienced condominium attorney. I called Donna DiMaggio Berger of the well-respected condominium law firm, Becker Poliakoff, for her opinion.

Berger stated that, in Florida, the emergency powers of the Association President and Board are very broad following a catastrophe and during an emergency situation so long as the Governor has stated that an emergency exists. During such times, they may authorize, without prior association member vote, using reserve funds for emergency repairs. The warning is there needs to be an emergency and an Order in place at the time. Otherwise, using reserve funds usually requires member approval through a vote pursuant to association by-laws. My advice is to get a condominium lawyer like Donna Berger to guide you through the process because she warned that "mistakes" can lead to fines and personal liability.

Alternatively, I have suggested to many of my past commercial property owner and association clients they obtain a credit line for emergency construction. Donna Berger agreed this is an excellent avenue for most Associations, but that the credit line should be obtained in advance to speed up the process.

Finally, special assessments can be made on association members to cover the shortfall of deductibles. These assessments can also provide interim funding of repairs caused by non-paying and slow paying insurance companies. This may be covered under loss assessment coverage, as noted in Florida Law Requires Loss Assessment Coverage for Condominium Unit Owner Policies. Loss assessment coverage usually pays up to a limited amount for the special assessments required as a result of the Association not purchasing or not having enough coverage under the master policy. However, some recent individual policies exclude coverage for assessments made to cover the shortfall of deductibles, and members purchasing this cheap form of condominium insurance will suffer out-of-pocket losses.

There is no easy answer on which is the best alternative for quickly obtaining funds to pay for the repair, but there are alternatives to just doing nothing. It is my experience that getting repairs underway and finished right away is far better for association morale and welfare. Getting repairs completed, even when insurance companies do not pay, helps put rental income into the pockets of apartment and commercial building owners and prevents many tenants from cancelling leases resulting in lost revenues once the repairs are completed.

Positive Thought of the Day

If your actions inspire others to dream more, learn more, do more and become more, you are a leader.
—John Quincy Adams

What our clients say about us

Thank you guys for all your effort and your hard work, it pays off- hard work pays off

–- Harvey Property Management Company

Insurance Claim Dispute

She has always been there for us and willing to take the time to explain each step in dealing with our claim. She has greatly reduced the stress for us in dealing with our fire.

–- Jack M.

Insurance Claim Dispute

Thanks to you, your hard work and expertise the total settlement for my claim ended up being $1,328,500.00. This whole experience could have been a disaster, but thanks to you and your team, I feel I received the settlement I deserved.

–- Jim F.

Insurance Claim Denied

We are very satisfied with Merlin Law Groups efforts to resolve our insurance issues with the Hartford. They were persistent and the outcome was successful.

––Trina W.

Insurance Claim Dispute

We are truly grateful for your help in solving this unfortunate situation. Thanks just doesn’t seem enough. We were blessed to find you and will never forget.

–Ron & Melody W.

Insurance Claim Dispute

I want you to know how pleased I am with Merlin Law Group for settling our case against Citizens after they denied our claim.

–Esme S.

Insurance Claim Dispute

Suffering many damages and losing hope of recovering from our insurer was a terrible experience. But thanks to Merlin Law Group and their terrific staff, we did realize recovery for many losses.

latest tweets

The accounts of recent trials, verdicts and settlements contained in this website are intended to illustrate the experience of the law firm. Prospective clients may not obtain the same or
similar results as each case is unique.